Peter Kingston and the African oil opportunity for Tower Resources

Friday, Jun 03 2011 by
8
Peter Kingston and the African oil opportunity for Tower Resources

When Tower Resources (LON:TRP) drilled the second of two unsuccessful wells on its acreage in Uganda in February 2010 the value of shares in the AIM listed company slumped. With all the data pointing to a expected oilfield, Tower’s exploration managers were left reeling by the drilling results. For executive chairman Peter Kingston the situation presented the dilemma of whether or not to have another shot at drilling what is regarded to be a hugely prospective region made famous by the nearby discoveries of Heritage Oil (LON:HOIL) and Tullow Oil (LON:TLW) . His decision to try again later this year will see a new well drilled on an interesting new prospect just 15km away from the last well. Despite encouraging results from detailed surveys he remains conservative about the chances of success – having seen the hopes of the company and its investors dashed twice before. Of more significance is the increasing excitement around forthcoming plans to drill the first well on acreage offshore Namibia – and test a prospect that could contain up to 5 billion barrels.

While Uganda remains what Kingston calls “the icing on the cake”, attention is now turning to Namibia, where Tower has a 15 per cent stake in acreage off the skeleton coast. The company’s costs for the first well (and, if successful, a second well) are being carried by the licence operator, Arcadia Petroleum. Arcadia is currently looking for a partner for the project and is planning to drill the first well early next year. Detailed seismic surveys have identified a huge potential prospect, including what has been named the Delta Maastrichtian reservoir and a second potential significant Albian age reservoir underneath, together with various secondary leads. For Kingston and his exploration team, the data reveals something more exciting than anything they have ever seen.

Peter, back to March 2010 Tower had just drilled the second of two wells in Uganda. Both were ultimately unsuccessful so what was the sense of feeling inside the company at that time?

That second well location was always the best we could do with the available data. After that well we had a lot of interesting information but we still didn’t have any reservoir. When we started the campaign we thought that the…

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Tower Resources plc is an upstream oil and gas exploration company. The Company has exploration projects in Cameroon, South Africa, Zambia, and Sahawari Arab Democratic Republic (SADR). The Company has two segments: Africa and Head Office. The Company is an operator of international licenses with a focus on projects in Africa. It holds an interest in Thali Production Sharing Contract (PSC) in Cameroon, which covers an area of approximately 120 square kilometers (kms) and lies in the prolific Rio del Rey basin, in the eastern part of the Niger Delta. It holds an interest in Algoa-Gamtoos license, South Africa, which covers an area of approximately 11,800 square kms. It also holds an interest in the offshore Guelta and Imlili blocks, and the onshore Bojador block in the SADR, which covers an area of approximately 72,700 square kms. It has interests in blocks 40 and 41 of the frontier Zambezi Basin, which covers an area of approximately 6,950 square kms. The Company has no revenues. more »

LSE Price
1.13p
Change
7.1%
Mkt Cap (£m)
5.9
P/E (fwd)
n/a
Yield (fwd)
n/a



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